Gold prices in Dubai opened sharply lower on Monday, with the 14-karat rate falling to Dh300 per gram as higher oil prices and growing expectations of another US interest-rate hike put pressure on bullion.
The drop was particularly noticeable in the 24-karat category. According to Dubai Gold and Jewellery Group data cited by Gulf News, 24K gold fell to Dh505.50 per gram, down Dh11 from the previous close of Dh516.50. 22K gold was trading at Dh468 per gram, while 14K dropped to Dh300.
Gold Comes Under Fresh Pressure
The latest decline extends a broader period of weakness for gold after the precious metal faced pressure from rising oil prices, higher bond yields and changing expectations for US monetary policy.
Spot gold was trading at around $4,197.54 an ounce at 8:30 a.m. Dubai time, down 1.88%. The metal has remained well below its January record of nearly $5,600 an ounce as traders reassess the outlook for interest rates and inflation.
Gold generally comes under pressure when interest rates and bond yields rise because higher-yielding assets become more attractive compared with non-interest-bearing bullion.
Oil Prices Add to the Pressure
The latest move also comes as crude prices remain elevated amid continued uncertainty surrounding the Strait of Hormuz.
Higher energy costs have increased concerns about inflation, while markets are watching whether central banks will need to keep monetary policy tighter for longer. Gulf News reported that Brent crude has risen more than 70% in 2026, adding to the inflationary pressure facing markets.
The combination of expensive oil, inflation concerns and rising rate expectations has created a difficult environment for gold prices.
Markets Expect Another US Rate Increase
Federal Reserve policy is another major factor behind the recent selling pressure.
Fed officials backed a quarter-point increase earlier in September, and several policymakers have since indicated that additional rate increases could be needed to contain persistent inflation. Markets were pricing in about a 65% probability of another rate hike in October, according to the latest market assessment cited by Gulf News.
Investors are therefore closely watching upcoming US economic data and comments from Federal Reserve officials for clues about the next move in interest rates.
Dubai Gold Has Fallen Significantly
The latest decline marks a substantial change from late August, when 24K gold was trading above Dh550 per gram in Dubai. Historical Dubai Gold and Jewellery Group data show that 24K gold was Dh554.50 per gram on August 27, compared with Dh505.50 on September 28.
That means the 24K rate has fallen by nearly Dh49 per gram in just over a month, highlighting the volatility gold has experienced recently.
What It Means for UAE Gold Buyers
For consumers, the fall in local gold prices could make jewellery purchases more affordable compared with the levels seen in August.
However, the final price paid at jewellery shops can be higher than the quoted gold rate because of making charges, design costs and other applicable fees. Prices can also change during the day as international bullion markets move.
With 14K gold now around the Dh300 mark and 24K below Dh510, UAE buyers are entering the week with noticeably lower gold prices than they saw several weeks ago. The direction from here will largely depend on oil prices, US rate expectations and developments surrounding the Middle East.
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